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Balassa?Samuelson Effect in Iran

Proceeding: 12th International Academic Conference (IAC)

Publication Date:

Authors : ; ; ;

Page : 452-463

Keywords : Balassa?Samuelson effect; purchasing power parity; productivity gap; tradable and non-tradable sectors;

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Abstract

Deviations from purchasing power parity because a deviation of productivity is Balassa?Samuelson effect. The Balassa?Samuelson effect depends on inter-country differences in the relative productivity of the tradable and non-tradable sectors. According to this hypothesis, Imai (2010) make a model and measurement Balassa?Samuelson effect in Japan during 1970-1955 when exchange rate in Japan is fixed. In this paper we measurement Balassa?Samuelson effect in Iran economic. The result shows that Balassa?Samuelson effect in Iran is -2.1. Then devaluation of the national currency in Iran according to Balassa?Samuelson effect would be equal to 2.1 in annual, while devaluation of the national currency in Iran 13% in a year.

Last modified: 2015-03-07 20:31:12